8/4/22, 9:45 AM LAW 4 FINAL EXAMINATION

LAW 4 FINAL EXAMINATION

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A person is said to have an insurable interest in the subject matter insured * 2 points
where he has a relation or connection with, or concern in it that he will
derive pecuniary benefit or advantage from its preservation. Which among
the following subject matters is not considered insurable?

A partner in a firm on its future profits.

A general creditor on the debtor’s property

A judgment creditor on debtor’s property

A mortgage creditor on debtor’s mortgaged property.

X, Co. a partnership, is composed of A (capitalist partner), B (capitalist * 2 points

partner) and C (industrial partner). If you were partner A, who between B

and C would you have an insurable interest on, such that you may then
insure him?

No one, as there is merely a partnership contract among A, B and C.

Both B and C, as they are your partners.

Only C, as he is an industrial partner.

Only B, as he is a capitalist partner.

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8/4/22, 9:45 AM LAW 4 FINAL EXAMINATION

As a rule, an insurance contract is consensual and voluntary. The * 2 points

exception in the case of:

Inland Marine Insurance

Industrial Life Insurance

Motor Vehicle Liability Life Insurance

Life Insurance

X, a minor, contracted an insurance on his own life. Which statement is * 2 points

most accurate?

The life insurance policy is void ab initio;

The life insurance is valid provided it is with the consent of the beneficiary;

The life insurance policy is valid provided the beneficiary is his estate or his parents,
or spouse or child;

The life insurance is valid provided the disposition of the proceeds will be subject to
the approval of the legal guardian of the minor.

In return for the 20 years of faithful service of X as a house helper to Y, the * 2 points
latter promised to pay P100,000 to X’s heirs if he (X) dies in an accident by
fire. X agreed. Is this an insurance contract?

Yes, since all the elements of an insurance contract are present.

Yes, since X’s services may be regarded as the consideration.

No, since Y actually made a conditional donation in X’s favor.

No, since it is in fact an innominate contract between X and Y.

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8/4/22, 9:45 AM LAW 4 FINAL EXAMINATION

In 2010, the PNP declared Kaddafy Benjelani “Public Enemy No. 1” * 2 points
because of his terrorist activities in the country that have resulted in the
death of thousands of Filipinos. A ransom of P15 M was placed on
Kaddafy Benjelani’s head.Worried about the future of their family, Kaddafy
Benjelani’s estranged wife, Aurelia, secured in December 2010 a life
insurance policy on his life and designated herself as beneficiary.Is the
policy valid and binding?

Yes, the policy is valid and binding because Aurelia has an insurable interest on the
life of Kaddafy Benjelani.

No, the policy is not valid and binding because Kaddafy Benjelani has been officially
declared a public enemy;

Yes, the policy is valid and binding because it has been in force for more than 2
years;

No, the policy is not valid and binding since the spouses’ estrangement removed
Aurelia’s insurable interest in Benjalani’s life;

None of the above.

X has been a long-time household helper of Z. X’s husband, Y, has also * 2 points
been Z’s long-time driver. May Z insure the lives of both X and Y with Z as
beneficiary?

Yes, since X and Y render services to Z.

No, since X and Y have no pecuniary interest on the life of Z arising from their
employment with him.

No, since Z has no pecuniary interest in the lives of X and Y arising from their
employment with him.

Yes, since X and Y are Z’s employees.

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8/4/22, 9:45 AM LAW 4 FINAL EXAMINATION

An insurance contract is an aleatory contract, which means that— * 2 points

An insurer will pay the insured equivalent to the amount of the premium;

The obligation of the insurer is to pay depending upon the happening of an uncertain
event;

The insured pays a fixed premium for the duration of the policy period and the
amount of the premiums paid to the insurer is not necessarily the same amount as
what the insured will get upon the happening of an uncertain future event;

The obligation of the insurer is to pay depending upon the happening of an event
that is certain to happen.

X is a passenger of a jeepney for hire being driven by Y. the jeepney * 2 points

collided with another passenger jeepney being driven by Z who was driving
recklessly. As a result of the collision, X suffered injuries. Both passenger
jeepneys are covered by Comprehensive Motor Vehicular Insurance
Coverage. If X wants to claim under the “no fault indemnity clause”, his
claim will lie—

Against the insurer of the jeepney being driven by Z who was the one at fault;

The claim shall lie against the insurer of the passenger jeepeney driven by Y because
X was his passenger;

X has a choice against whom he wants to make his claim;

None of the above.

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8/4/22, 9:45 AM LAW 4 FINAL EXAMINATION

An Insurance Contract is a contract of adhesion, which means that in * 2 points

resolving ambiguities in the provision of the insurance contract –

The general rule is that, the insurance contract is to be interpreted strictly in

accordance with what is written in the contract;

Are to be construed liberally in favor of the insured and strictly against the insurer
who drafted the insurance policy;

Are to be construed strictly against the insured and liberally in favor of the insurer;

If there is an ambiguity in the insurance contract, this will invalidate the contract.

A group of Malaysians wanted to invest in the Philippines’ insurance * 2 points

business. After negotiations, they agreed to “FIMA Insurance Corp.” with a

group of Filipino businessmen. FIMA would have a P50 M paid up capital.
P40 M of which would come up from the Filipino group. All corporate
officers would be Filipinos and 8 out of 10-member Board of Directors
would be Filipinos. Can FIMA operate an insurance business in the
Philippines?

No, since an insurance company must have at least P74 M paid up capital.

Yes, since there is substantial compliance with our nationalization laws respecting
paid-up capital and Filipino dominated Board of Directors.

Yes, since FIMA’s paid up capital more than meets the country’s nationalization laws.

No, since an insurance company should be 100% owned by Filipinos.

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8/4/22, 9:45 AM LAW 4 FINAL EXAMINATION

For both the Life Insurance and Property Insurance, the insurable interest * 2 points

is required to be—

Existing at the time of perfection of the contract and at the time of loss;

Existing at the time of perfection and at the time of loss for property;

Existing at the time of perfection for property insurance but for life insurance both at
the time of perfection and at the time of loss;

Existing at the time of perfection only.

X is the common law wife of Y. Y loves X so much that he took out a life * 2 points

insurance on his own life and made her the sole beneficiary. Y did this to
ensure that X will be financially comfortable when he is gone. Upon the
death of Y—

X as sole beneficiary under the life insurance policy on the life of Y will be entitled to
the proceeds of the life insurance;

Despite the designation of X as the sole beneficiary, the proceeds of the life
insurance will go to the estate of Y;

The proceeds of the life insurance will go to the compulsory heirs of Y;

The proceeds of the life insurance will be divided equally amongst X and the
compulsory heirs of Y.

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8/4/22, 9:45 AM LAW 4 FINAL EXAMINATION

X, in January 30, 2009, or 2 years before reaching the age of 65, insured his * 2 points
life for P20 M. for reason unknown to his family, he took his own life 2 days
after his 65th birthday. The policy contains no excepted risk. Which
statement is most accurate?

The insurer will be liable;

The insurer will not be liable;

The state of sanity of the insured is relevant in cases of suicide in order to hold the
insurer liable;

The state of sanity of the insured is irrelevant in cases of suicide in order to hold the
insurer liable.

The “incontestability clause” in a Life Insurance Policy means— * 2 points

That life insurance proceeds cannot be claimed 2 years after the death of the
insured;

That 2 years after date of issuance or reinstatement of the life insurance policy, the
insurer cannot anymore prove that the policy is void ab initio or rescindable by
reason of fraudulent concealment or misrepresentation of the insured;

That the insured can still claim from the insurance policy after 2 years even though
premium is not paid;

That the insured can only claim proceeds in a life insurance policy 2 years after
death.

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